Tax and NI
Simplified expenses: mileage and home flat rates
Flat rates per mile and per month of home working that replace receipts for running a vehicle and heating a home office.
Simplified expenses let a sole trader claim vehicle and home-working costs at flat rates instead of adding up real bills. For 2026/27 a car or van earns 55p a mile for the first 10,000 business miles and 25p for each mile after that, so a mobile hairdresser who drives 12,000 business miles deducts £6,000. Before 6 April 2026 the first band paid 45p, so the same mileage was worth £5,000. Motorcycles get 24p a mile at any distance. For working at home the flat rate depends on hours, not floor space: £10 a month for 25 to 50 hours, £18 for 51 to 100 and £26 from 101 hours. Sole traders and partnerships with no company partners can use them; limited companies cannot. Enter your miles and months below to total the claim.
Simplified expenses for 2026/27
Flat-rate expenses
£6,280
| Car or van | £6,000 |
| Same miles at the old rate | £5,000 |
| Motorcycle | £0 |
| Working from home | £280 |
Figures checked by Radif Partners · Editorial policy · How we calculate
The new first-band rate and what it adds
The 2026/27 increase applies only to the first 10,000 miles, so anyone who drives at least that far gains the same fixed amount from it. Beyond the band, the rate is unchanged. The table compares the two years for a car or van.
| Business miles | Claim 2026/27 | Claim at the old rate | Extra deduction |
|---|---|---|---|
| 5,000 | £2,750 | £2,250 | £500 |
| 10,000 | £5,500 | £4,500 | £1,000 |
| 12,000 | £6,000 | £5,000 | £1,000 |
| 15,000 | £6,750 | £5,750 | £1,000 |
| 20,000 | £8,000 | £7,000 | £1,000 |
A deduction is not cash in hand: it lowers profit, and what you save is the tax on that profit. A plumber with £38,000 of profit before motoring costs who drives 9,000 business miles deducts £4,950, which takes £1,287 off the Income Tax and Class 4 bill in England, Wales or Northern Ireland.
What the mileage rate replaces
The flat rate stands in for the whole cost of buying and running the vehicle: fuel, insurance, servicing, repairs, breakdown cover and vehicle tax. You cannot add any of those as well, nor claim capital allowances on the purchase. Parking and other travel, such as train journeys, remain separate expenses. Cars designed for commercial use, such as black cabs, hackney carriages and dual-control cars used by driving instructors, are outside the scheme, and so is any vehicle already in your capital allowance claims or already deducted as an expense. You do not have to use it for every vehicle, but once you start on one you are tied to it while that vehicle stays in the business. Keep a mileage log with dates, destinations and purpose: the claim is only as good as the record behind it.
Working from home, by the hour
The home rate ignores the size of your house and the bills you actually pay. You count the hours of business work done at home in each month, and only months of 25 hours or more qualify. A bookkeeper who works 40 hours at home for three months, 70 for six and 120 for three claims £216 for the year. That is modest next to a careful apportionment of heating, electricity and Council Tax, which is why people with a dedicated office often work out the real figures instead; the allowable expenses guide explains that method. Phone and internet stay outside the flat rate in either case.
A third flat rate exists for people who live at their business premises, such as a small guesthouse or bed and breakfast. It works the other way round: you add up all the premises costs, then subtract a monthly amount for private use based on how many people live there.
Using the rates on your return
Simplified expenses are optional and can be mixed with real costs for everything else. At the end of the year you multiply the miles, hours and months by the flat rates and add the result to your total expenses on the Self Assessment return; nothing separate is sent. They work with the cash basis or traditional accounting, but not with the trading allowance, which replaces all expenses. Sources: GOV.UK, Simplified expenses: vehicles (rates for 2026 to 2027); GOV.UK, Simplified expenses: working from home.